Ms KING (5:10 PM)
—I want to raise the importance of the textile, clothing and footwear industries to Ballarat and the threats that are posed to these industries. The textile, clothing and footwear industries have always been important to Ballarat's economy. TCF workers have a proud history in Ballarat. Like many other communities, we have faced substantial closures over the last 10 to 20 years, but many industries have hung in there. TCF industries know that they work in a competitive environment but they have developed niche products, gone after new markets and improved their production processes. Tariffs for the TCF sector were frozen in 2000 until 2005, when they were set to be reduced. The Productivity Commission, in its interim report, seems to want to go even further, with tariff reductions beyond those put forward for 2005. In addition, the Productivity Commission seems set to undermine the industry readjustment programs for the sector.

As the TCF industry employs a large number of people in my electorate, I am justifiably concerned by the Productivity Commission's proposals. I commend the City of Ballarat for its submission to the Productivity Commission review and for advocating for the hundreds of workers in my electorate who are employed in this sector. I also commend the Ballarat Trades and Labour Council for developing sensible policy suggestions to put to the commission on behalf of Ballarat workers. At present over 500 people are directly employed in the industry in Ballarat and surrounding areas. Companies in Ballarat such as Hilton Fabrics and Creswick Woollen Mills employ up to 100 people each, with small and medium firms such as Comfy Garments and Bulace Dyeing employing smaller numbers. Census figures for 2001 used in the City of Ballarat's submission show that textile, clothing and footwear employees make up around 6.8 per cent of the manufacturing jobs in the city alone.

With the huge changes that this sector has undergone, the industries in my electorate have had to constantly innovate. They have established themselves in new markets and have developed new products which are becoming recognised across Australia for their high quality. Creswick Woollen Mills blankets are sold internationally. I note that they have been chosen by Qantas as one of fewer than 50 products to be sold through the new in-flight Wish on Q store. Comfy Garments have specialised in developing comfortable, high-quality, easy-to-wear garments for older people, particularly those in nursing homes, and have been recognised locally through the Ballarat Business Awards.

The City of Ballarat submission identifies 22 TCF industries. They include B&D Troughton Screen Printers, Ballarat Blinds, Creswick Blinds, Country Babes, Bulace Dyeing, Creswick Woollen Mills, Rivers, Oliver Footwear and a range of others. Business Ballarat estimates that in 2002-03 over half of these industries were involved in export activities. The TCF industries in my electorate have indicated that they intend to operate beyond 2005 but their decision to do so will be highly reliant on what happens to tariffs. The City of Ballarat has estimated that the combined production output and wage expenditure of the TCF sector in Ballarat and region is around $68.4 million. The TCF industries contribute not only directly to the local economy via employment but also to other industries such as freight and small engineering. TCF workers' wages also boost the local economy through their purchase of local goods and services.

The TCF companies in my electorate have invested significantly in the industry. I would like to highlight the case of Oliver Footwear, which is included in the City of Ballarat submission to the Productivity Commission. The Oliver Footwear company retains its commitment to footwear manufacturing in Ballarat where it has been operating for over 100 years. Innovation in product research and development to address the needs and demands of tough workplace safety environments has been a central part of the company's philosophy. Its innovation in manufacturing technology and business systems has been reflected by a more than $7 million investment in new capital. Today Oliver Footwear is one of Australia's largest producers of industrial and safety footwear and a company committed to operating at world's best practice in all dimensions.

Its $7 million capital investment has included the installation of a new 30-station DESMA German polyurethane injection moulding machine, complementing their original 24-station moulder and leading to the release of the Oliver GRIPthane range of safety and recreational footwear. The investment has also seen the commissioning in late 1999 of a new MAIN Group dual-density nitrile rubber moulding machine for their Oliver SOFTtrac range of safety footwear. Complementing these major capital investment items has been the incorporation of significant robotic process applications and streamlining of their materials management and production flows and a just-in-time manufacturing strategy. Complementing their manufacturing and process improvement investments has been the addition of expanded warehousing capacity. Oliver Footwear has invested significantly in the electronic commerce and information technology. All Oliver Footwear is manufactured to Australia standard AS/NZS 2210.2, while individual footwear products are continuously benchmarked against other recognised international industry and performance tests. Oliver Footwear is an accredited quality endorsed company to the Australian and International Quality Standard ISO 9002.

These are just the sorts of industries and the sorts of innovations we should be supporting in this country. In my view the Productivity Commission has clearly failed to make their case for further tariff cuts in the TCF industries. In 2000, Labor carried a resolution at our national conference which clearly commits us to a review to be undertaken before any tariff cuts are introduced in 2005. According to the resolution, the review must take into account the tariff and non-tariff barriers practised by our trading partners and the likely social impact of further tariff reductions on TCF workers and the broader community.

Labor supports the continuation of the Strategic Investment Program until 2015. The Productivity Commission seems set to well and truly phase this out. We also believe that the current eligibility threshold should be lowered to allow smaller TCF firms—such as Comfy Garments—to access the scheme. I see in my own electorate the innovation that is being undertaken by many of the smaller firms and think that we certainly should support it and encourage their investment in innovation.

We also consider that the SIP should be reconfigured to give greater reward to innovation in product design, production and delivery and that it should use a more flexible definition of `innovation', concentrating on areas that will boost the competitiveness of existing TCF operations. Labor also believe that the labour adjustment program scrapped by this government in 1996 should be reintroduced. It was a Labor government that introduced the TCF Labour Adjustment Program, which included wage subsidies, training and relocation assistance for up to one year. This program was to help increase the skills of TCF workers and to assist in industry restructuring.

There is a strong future for the TCF industries within Australia. It is important that we support the innovation of these industries as they restructure and move into more niche markets and into making quality products for Australian consumers. It is important that we support TCF industries not just for the products that they produce but also for the employment in regional cities such as my own. Many TCF industries are located within regional and rural centres close to the raw materials that they utilise for their production. A reduction in tariffs in 2005 could potentially see their closure and the loss of employment in regional and rural Australia. It is certainly something that we have to resist as much as we possibly can. This industry has had a strong history in this country. We are proud producers of textiles, clothing and footwear and we should be doing everything we can to ensure that this industry not only survives but thrives in our regional areas.

My concern with the Productivity Commission's interim report is that they have failed to factor in what will happen to regional areas such as Ballarat if the tariffs are reduced—and not only if the tariffs are reduced in 2005 but if, as the Productivity Commission is proposing, they are further reduced beyond 2005. I am also concerned about the Productivity Commission's proposal to possibly remove or phase out the Strategic Investment Program, which has been vitally important in ensuring that innovation in the textile, clothing and footwear sectors—such as what we have seen at Oliver Footwear, Hilton Fabrics and Comfy Garments and other companies in my electorate—has occurred. It is also important to recognise that the sector is changing—that it has invested significantly in innovation and that we should continue to support that innovation. The sector is changing and a labour adjustment program would certainly be of assistance. The Button industry plan for textile, clothing and footwear really saw the survival of the sector. While it certainly saw some closures during that period, if it had not been in place, we would have seen even further closures and the sector would not have survived. We are at a similar crisis point at the moment. Labor sees a strong future for the textile, clothing and footwear industries. I see a strong future for the textile, clothing and footwear industries in my electorate, but it will only happen if we support them. Labor stands proud and ready to support them. We hope that the Liberal and National Party government is also prepared to do the same. (Time expired)